Marine Cargo Insurance refers to the insurance of goods shipped from one place to another, anywhere in the world.

Coverage is usually effected on a “per voyage” basis that is from the time the goods leave the premises of the seller until the time they finally arrive at the buyer’s premises. There is no period specified in the policy.

Coverage can either be effected by the buyer or the seller depending on the contract of sales. There are different types of recognised Sale Contracts, the most common affecting Marine Insurance are:

F.O.B. (Free On Board)

It is the seller’s obligation to place the goods on board vessel at his own expense and obtain the Bill of Lading. He (the Seller) is also responsible for all loss or damage until goods are on board vessel. Thereafter the goods are at buyer’s risks.

C & F (Cost and Freight)

Seller provides goods with all freight and other charge paid to the port of discharge but does not include insurance charges. He (the Seller) is also responsible for the loss or damage to goods until delivery on to the carrying vessel but it is the responsibility of buyer to arrange insurance.

C.I.F. (Cost, Insurance & Freight)

The Seller undertakes to arrange and pay for all costs of delivering the goods and insurance up to final destination because the buyer has paid for these in the sale price. The insurance policy is assigned to the consignee and he can claim under the policy as though he had arranged the insurance himself.

Type of Marine Cargo Insurance Policies

1.Individual Policy

These are policies issued on each and every shipment upon request by the Assured.

2.Open Cover Policy

The Open Policy is a continuous policy that is issued on certain date and remains in force until cancelled. The policy provides automatic protection for all shipments described in the policy.

This arrangement is suitable for merchants who are engaged in regular import/export or internal trade.

Coverage in Marine Cargo Insurance

Shipment by vessel

Sending by air

Inland Transit

Sending by post or courier service

1.Shipment By Vessel

Types of coverage available are :

Institute Cargo Clauses ( C )

Institute Cargo Clauses ( B )

Institute Cargo Clauses ( A )

Institute Cargo Clauses ( C )

It covers loss of or damage to the interest insured attributable to :

fire or explosion

vessel being stranded, grounded, sunk or capsized

overturning or derailment of land conveyance

collision or contact of vessel with external object other than water

discharge of cargo at a port of distress

It also covers loss or damage to interest insured caused by :

General Average Sacrifice

Jettison

Note :

General Average arises where a sacrifice is incurred in connection with a venture with a view to saving or minimizing the loss as a whole. This means that some of the cargo needs to be sacrificed in order to save others. There is liability resting upon the owners of cargo to contribute towards the damages or expenses suffered by those whose cargoes are sacrificed.

Institute Cargo Clauses ( B )

In addition to coverage provided under “C” policy, it also covers loss or damage to goods insured attributable to earthquake, volcanic eruption or lightning and loss of or damage to interest insured by :

entry of sea, lake or river water into vessel

total loss of any package lost overboard or dropped whilst loading on to, or unloading from vessel

Institute Cargo Clauses ( A )

It covers all fortuitous losses of every description but excludes loss, damage or expense proximately caused by delay, inherent vice or nature of the goods.

Marine Hull Insurance covers loss or damage to hull and machinery. The hull is the structure of the vessel. Machinery is the equipment that generates the power to move the vessel and control the lighting and temperature system such as boiler, engine, cooler and electricity generator.

Scope of Cover

Institute Time Clauses

These are the main clauses and most important in Marine Hull policies. Time Clauses covers for a specific period usually 12 months. As the nature and degree of risks which the Insurer run vary according to the kind of vessel, there exist a number of categories in the Time Clauses. They are : –

Institute Time Clauses (Hull)

Institute Time Clauses (FPA)

Institute Time Clauses (Total Loss Only)

1.Institute Time Clauses (Hull)

Provides the maximum coverage offered by hull insurance.

Perils Covered

1.Perils of the sea

2.Fire & explosion

3.Violent theft

4.Piracy

5.Breakdown of accident to nuclear installations etc.

6.Contact with aircraft

7.Earthquake, volcanic eruptions or lightning

8.Accidents in loading etc.

9.Bursting of boilers

10.Breakage of shaft

11.Latent of defect

12.Negligence of masters etc.

13.Negligence of repairers etc.

14.Negligence of charterers etc.

15.Barratry

Excluded Perils

1.Wilful misconduct of the Assured

2.Loss caused by delays

3.Wear and tear

4.Rats and/or vermin

5.Injury to machine not proximately caused by maritime peril

Paramount Exclusions in the Policy

1.War

2.Strikes

3.Malicious acts

4.Nuclear exclusion

Other Losses & Expenses Covered

1.Pollution Hazard

2.3/4th Collision Liability

3.General Average and Salvage

4.Sue and Labour

5.Constructive Total Loss

2.Institute Time Clauses (FPA)

The coverage of these clauses are similar to that of Hulls Clauses but exclude coverage on machinery damages in all respects. It is advised that all vessels which exceed 15 years of age or older, if the risk accepted, to give this coverage only. Past experience shows that older vessels suffer serious casualties due to machinery damage. If machinery damage is excluded due to limitation of this clause, there is a better chance of making hull underwriting profit.

3.Institute Time Clauses Hulls (Total Loss Only)

As the name suggested, this clause only covers in the event of it becoming a total loss by arrangement, actual, compromised or constructive total loss. The rate for this cover is low and usually this cover is only extended to old vessel (but not more than 20 years) or on accommodation only.

Institute Yacht Clauses

This clause are basically Institute Hull clauses amended for yachts and include all damages to hull, masts, spars, sails and other equipment on board the yacht but does not include damage whilst the yacht is racing.

Caution should be taken with regard to charter yachts and if the risk is accepted, the following warranty must be included into the policy conditions, namely:

‘Warranted that professional skipper & crew is in attendance at all times’

Full details of the Skipper and Crew’s experience must be obtained.

Institute Voyage Clauses

This insurance covers risks during a voyage from one port or place to another or a round voyage. In so far as ordinary vessels are concerned, as most of them are usually insured under a time policy, voyage insurance is effected only in such cases as delivery voyage of a new vessel to buyer from the shipyard or a voyage of a vessel to be repaired at shipyard. The period of coverage is usually less than a year and the scope of coverage is almost identical that of time policy. In which case, there are also the FPA and Total Loss cover.

Builders’ Risk Insurance

This type of insurance covers whilst vessel is under construction. During that period, it is exposed to risks such as fire, tidal wave, capsize or failure in launch. It is also exposed to collision and sinking on a trial trip. The builder’s risk insurance effected by shipyards provides cover against all such risks. The insured value is the contract price or the estimated completed value of the vessel if there is no contract price. The period of insurance should be from the time of inception of the construction to the time of delivery. Hence, the period can well exceed 12 months.

Hull War And Strike Risks Insurance

War and strike risks are usually excluded from the cover of ordinary marine insurance policies in any market throughout the world. This insurance covers exclusions under Article 11 of the Institute Time Clauses. It can only be effected on vessels which are insured against ordinary marine risks. The rate of premium fluctuates frequently reflecting the climate of world politics at the time of inception of the risk.

Terrorism Insurance

Terrorism cover is an excluded risk worldwide. There will be no consideration for acceptance if this coverage is required.

Loss of Time Insurance

This insurance indemnifies a ship owner for loss of anticipated profits or operating costs where the insured vessel is forced to be out of commission in consequence of damage caused by maritime accident. The period of insurance is one year and the insurable value is calculated based on the following: –

estimated operating costs

estimated chartering to be earned

estimated gross income of freight

The loss of time is covered on the basis of the number of days required for the completion of the repairs, counting from the day following the day of the accident. The Insurer’s liability per any one accident is limited to certain number of days up to 180 days throughout the year.

Marine cargo insurance covers the risks of loss or damage to goods and merchandise while in transit by any method of transport – sea, rail, road or air – and while in storage anywhere in the world between the points of origin and final destination. We have a number of marine cargo products to suit the needs of Small to Medium Enterprises. Find our individual solutions below. Or find information marine cargo for large and multinational business.

Why do we need marine insurance?

Most marine cargo shipments arrive at their destinations without an issue, and it’s easy to think that insurance is a discretionary cost in the logistical process. However, time and time again we hear in the news that the unexpected does indeed happen. If a vessel is lost at sea and your cargo can’t be salvaged, insurance cover will help protect you from financial and commercial loss.

Marine insurance is complex and needs to navigate legal principles from a number of legislative areas – domestic and international law to begin with, but also maritime law. Marine insurance experts stay abreast of these areas and know the intricacies of marine commerce and its many clauses, helping clients to risk manage their shipments and to have peace of mind in their daily operations.

A marine cargo policy is usually an annual policy tailored to suit the shipper’s needs. They range from basic protection against loss of goods through to more comprehensive policies which protect against loss of sales and provide for goods to be shipped as replacements. Marine insurance can also be taken out on a shipment-by-shipment basis.

Who needs marine insurance?

No matter what business you are in, chances are you will be shipping or receiving goods as part of your value chain. Marine insurance covers the process of moving cargo by sea, road, rail and air, as well as any storage the goods may require in between. As such, it is of vital interest for a broad range of businesses.

Single Transit Insurance (within Malaysia) is for ‘one off’ consignments of goods (other than home removals) or livestock within Malaysia.

Our Single Transit (within Malaysia) has a broad, market-leading and competitive cover.

Goods or livestock can be insured for loss or damage during any transit within Malaysia.

Goods in Transit Insurance

Goods in transit insurance is an annual cover where premium is based on the value of goods in transit, at the insured’s risk, during the policy period. It is the simplest and most convenient way to cover the insured’s inland transit risks.

Either all risks of loss or damage or defined events for goods or death by natural and accidental causes or accidental causes only for livestock can be covered.

Goods in Transit Insurance (own vehicles)

Goods in Transit Insurance (own vehicles) is a simple and inexpensive annual cover for major transit risks and theft of goods carried in any vehicle owned and/or operated by the insured and is not restricted to nominated vehicles.

It is particularly suited to small businesses and farmers with one or more vehicles used to collect or deliver goods or livestock.

Annual premium is calculated on the number of vehicles operated, type of goods/livestock carried and the nominated sum insured.

Goods in Transit (Carriers) Insurance

Goods in Transit (Carriers) Insurance provides the carrier with the ability to have commercial settlements made to their customers for loss or damage to their goods or livestock from an insured event at the carrier’s request, irrespective of their liability. If the carrier chooses not to accept the customer’s claim, the policy remains in force, with agreed legal costs covered, should the carrier elect at a later time to accept the claim.

This cover is available to all carriers – there is no requirement for the carrier to issue consignment notes or operate under other contracts of carriage.

This policy offers two levels of cover:

Comprehensive – against loss or damage to goods from accident or deliberate act of a third party or death of livestock from accident, natural causes or humane slaughter

Defined events – against loss or damage to goods or death of livestock from major transit perils including fire, flood, collision, overturning, impact.

Defined events cover can be optionally extended to cover:

Theft, pilferage, non-delivery

Accidental loss or damage during loading or unloading deterioration of refrigerated goods from breakdown or mismanagement of refrigerating machinery.

Specified Items in Transit Insurance

Specified Items in Transit Insurance is a simple and inexpensive annual cover for major transit risks and theft of specified goods regularly transported on any registered road vehicle or trailer.

This product is particularly suitable for tools of trade, mechanical and/or electronic equipment, musical instruments, computers or other equipment, eg racing cars or boats, suitable for tradesmen, professional people, small businesses, sporting groups, schools and associations. Premium is based on the type of specified items carried and the nominated sum insured.

Annual Marine Cargo Insurance

Annual marine cargo premium is based on the value of all shipments that the insured is responsible to insure. It is the simplest and most convenient way to cover the insured’s import and export risks.

Cargo is insured for loss or damage during import, export and within Malaysia transit.

Stock and equipment at exhibitions or while on display can also be covered under the policy.

Single Marine Cargo Insurance

Single marine cargo insurance is for ‘one-off’ insurance cover for import or export shipments, except home removals.

Our Single Marine Cargo has a broad, market-leading and competitive cover incorporating internationally recognised Institute Clauses with our own special conditions and additional clauses.

Cargo is insured for loss or damage during import, export including within the Malaysia leg of the journey.

Carriers Cargo Liability Insurance

Carriers Cargo Liability Insurance protects a carrier who operates using approved consignment notes or other contracts of carriage against their liability, in terms of these contracts, for loss or damage to their customers’ goods or livestock.

This cover is a relatively inexpensive way for the carrier who manages their risk contractually to protect them. Agreed legal costs incurred to defend claims against the carrier are covered.

Carriers Cargo Liability policy also extends to cover delay, loss of market or consequential loss caused solely by loss or damage to the insured goods or livestock. This cover is only limited to the difference between the amount paid for damage to the goods and the limit sum insured, not a small sub-limit.

Home Removals Insurance

Are you planning a move? If you are using professional removalists to help you get into your new home faster, you can cover your household goods with comprehensive door-to-door insurance.

Moving house is considered by many to be one of life’s most stressful situations. The pressure is heightened when the move is to a different country.

We can help you take some of the stress away by providing one of the most comprehensive home removals insurance solutions.

Our home removals insurance has been designed to cater for every level of cover and budget. You can cover your household goods and personal effects while in transit and also while in storage – providing seamless protection for precious goods and personal effects.

This policy is suitable for:

Families or individuals moving within Malaysia.

Families or individuals moving from anywhere in Malaysia to selected destinations overseas.

Marine Insurance can be classified into two main types, Marine Hull Insurance and Marine Cargo Insurance.

Marine Hull Insurance is for the loss or damage of ships, vessels, yachts, boats and ferries.

Marine Cargo Insurance is for the loss or damage of cargo carried by any mode of transportation while being held, transferred, loading and unloading between the points of origin or departure and the final destination or point of arrival or discharge.

The word marine though may suggest the mode of transportation by sea, however, in marine cargo insurance, the cargo other than being transported via sea, can be transported by land by lorries, trucks or train. Cargo can also be transported by air especially when the goods in the containers are perishable items that need to be shipped to the destination immediately by the exporter to the importer for delivery to the buyer or consumers. Air cargo is also covered under Marine Cargo Insurance.

Marine Hull Insurance is not limited to insuring the ship body and its motorised engine. It can also covers other floating structures like oil-rig platforms and barges.

Scope of Marine Hull Insurance coverage is wide and comprehensive as it can cover the loss or damage to the ship due to collision with another ship, or collision with a fixed object like a shipwrecked or harbour at terminals or sandbars or reefs. If there are bodily injuries to the third party on board the other ship or damage to the fixed objects like harbour or terminal, the marine insurance will have to pay for the claims by third party besides the cost of repair to the ship and its engine.

Marine Hull insurance usually covers up to three quarter of the insured’s liability to third parties. This development has encouraged the shipowners to band together in mutual underwriting clubs known as Protection and Indemnity Clubs (P&I), to insure the remaining one-quarter liability amongst themselves.

Most of the P & I Clubs work on the basis of agreeing to accept a shipowner as a member and levying an initial “call” (premium). With the fund accumulated, reinsurance will be purchased; however, if the loss experience is unfavourable one or more “supplementary calls” may be made and all the club members have to contribute to the fund. These P & I clubs will also try to build up their reserves in good time when there are fewer claims so that they will have more funds on standby.

An actual total loss occurs where the damages or cost of repair clearly equal or exceed the value of the ship or property . A constructive total loss is a situation where the cost of repairs of the ship plus the cost of salvage equal or exceed the value of the ship insured

Insurance of pleasure craft in nature like yacht is generally known as “yacht insurance” and includes liability coverage. Smaller vessels such as yachts and fishing vessels are typically underwritten on a “binding authority” or “lineslip” basis.

With the growing number of individuals who have grown financially rich and wealthy in Malaysia and the rests of the world, it has become a trending lifestyle for many to own private yachts and moor it at marinas like the ones at Georgetown, Penang Marina and Pulau Langkawi Marina clubs and Puteri Harbour and Danga Bay, Johor in Malaysia.

Like most classes of insurance, war risks is not covered by Marine Insurance. General hull insurance does not cover the risks of a vessel sailing into a war zone. A typical example is the risk to a tanker sailing in the Persian Gulf during the Gulf War involving Iraq and Kuwait, its allies in Arab Gulf countries and its major Western Allies like UK, France and NATO countries and USA.

The war risks areas are established by the London-based Joint War Committee, which has recently moved to include the Malacca Straits as a war risks area due to piracy. There have been several oil tanker ships and container ships being hijacked by pirates and terrorists near Sudan and Somalia which have given rise to many insurance losses and the governments of most of the affected shipping lines have made arrangement to send their naval forces to escort and patrol the seas in that area to curb piracy. If an attack is classified as a “riot” then it would be covered by war-risk insurers.

Marine Hull insurance policy can also include Increased Value(IV) cover to protect the shipowner against any difference between the insured value of the vessel and the market value of the vessel.

Some of the special covers are not readily available to the shipowners are the insurance company’s underwriter will look into other factors in accepting the risks proposed.

Marine Cargo insurance is underwritten on the Institute Cargo Clauses, with coverage on an A, B, or C basis, A having the widest cover and C the most restricted. Valuable cargo is known as specie. Institute Clauses also exist for the insurance of specific types of cargo, such as frozen food, frozen meat, and particular commodities such as bulk oil, coal, and jute. Sometime a cargo may be a herd of animal livestock like cows and sheep.

Marine Cargo Insurance has also engaged many parties like shipping agents, Shipping Lines, Integrated Land Transporters and Aviation Cargo Industry and specialized professionals like quality and quantity packing inspection agencies and marine loss adjusters who will determine the value or sum insured, salvage and sacrifice and adequacy of sum insured and average calculation.

Marine Cargo policies can be issued on annual open cover basis or on per consignment or shipment basis.

If you need a Marine Hull Insurance or Marine Cargo Insurance from general Marine insurance agent in Malaysia, please contact us. If you are from outside of Malaysia, please contact us ACPG Careline +603-92863323 or via email enquiry@acpgconsultant.com.

ACPG Management Sdn Bhd

Your Experience Insurance Risk Management and Solution Service Provider since year 1989 and Head Office Located at Kuala Lumpur Malaysia .

One of the reasons we at ACPG Management Sdn Bhd, are one of the top Property and Casualty Insurance Agency in the Kuala Lumpur Malaysia market, is due to the quality and variety of insurance solution and consultancy services we provide. Be it automotive insurance, fire insurance, all others type classes of life and general insurance, consequential loss insurance, insurance of precious possessions or what have you, you can rest assured that we provide nothing less than what are stated below, which makes us an insurance agency that is truly “Almost with No Comparison”, and we do not make such claims lightly.

By its very nature, a claim is made at a difficult and stressful time. You may need to make a claim because you have been burgled, there has been a fire or flood or worse and your business may be forced to stop operating. In such a situation, you need a settlement and fast.

Most insurance companies are well aware of this and if you are making a claim directly to an insurance company or through an unqualified agent and without any professional help, you may find the small print in your policy is not what you expected or the settlement amount is not enough.

When you have to make a claim, the insurance company will send out a loss adjustor to assess the damage. It is important to understand that the loss adjustor works for the Insurance company and not you so they will put the interests of the insurance company first.

If you are one of our clients, we will represent your interests when the loss adjustor visits the scene and in any discussions or negotiations to ensure you get the best possible settlement.

If you would like to meet for an informal consultation about your insurance needs and how we can place your coverage at exceptional rates, please do not hesitate to contact us.

Risk Management

Risk is when there’s an uncertainty about whether an event will or will not occur. Thus, risk management is the process of identifying exposures to risk, choosing the best method for handling each exposure and implementing it.

Insurance refers to a contract that reduces risk of loss and requires one party to pay a specified sum to another if a previously identified event occurs. Thus, insurance planning is the process of handling and safeguarding against future risk of loss and ensuring sufficient compensation is provided.

Risk Management Technique

When it comes to risk management, there are 4 basic methods :

Risk Avoidance

To avoid engaging in an activity or owning property that might lead to an exposure of risk.